Industry Experts See Affordable Housing Push from GST Cuts

The 56th meeting of the Goods and Services Tax (GST) Council has approved the reforms that were announced by Prime Minister Shri Narendra Modi on 15th August 2025. These reforms are being considered PIVOTAL as they focus on providing major relief to the common man of India by reducing the tax burden on essential goods and services, simplifying compliance for businesses, and promoting overall economic growth.

The GST Council’s decision to rationalise tax slabs, particularly reducing GST on key construction materials such as cement, marble, and granite, has drawn widespread approval from real estate stakeholders. The move is expected to lower input costs, improve affordability for homebuyers, and provide a timely boost to demand ahead of the festive season, a period traditionally marked by high registrations and project launches.

Industry leaders note that while the reduction in GST rates on raw materials is a step towards easing costs, the full impact on housing affordability will depend on how developers pass on the benefits. At the same time, the reform is being seen as a structural measure to simplify India’s tax regime, improve transparency, and provide a more predictable framework for the sector.

Industry Opinion

Mr. Neeraj Akhoury, President, Cement Manufacturers’ Association and Managing Director, Shree Cement Limited

“The Cement Manufacturers’ Association (CMA) welcomes the Government of India’s announcement reducing the GST rate on Cement from 28% to 18% on a long standing request of the Cement Industry. The Cement Industry considers it a progressive step towards simplifying the tax structure.

For a long time, Cement has been taxed at one of the highest rates among essential building materials compared to sectors such as steel and several other construction input materials. Lowering the rate to 18% corrects this long standing anomaly and ensures parity with other core materials.

Moreover, a reduction in GST stands to enhance the competitiveness of the Indian Cement Industry by creating a fair game with global peers. Given that Cement is a foundational input material for infrastructure and housing, treating it more fairly in the tax structure is consistent with global practices and will likely boost consumption of this key building material towards augmenting considerable infrastructure, including affordable housing.  We look forward to being the Nations’ continued partner in progress.”

Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd.

 “We wholeheartedly welcome the GST Council’s move on rate rationalisation ahead of the festive season. By reducing the tax burden, the move comes as a major relief for the common man. The housing sector, particularly, stands to benefit from GST reduction on input materials like cement from 28% to 18% and granite blocks from 12% to 5%, as this will ultimately reduce home prices for consumers and create sustainable demand across segments. This reform gives a major push to the housing sector making homeownership more accessible for a wider population.”

Mr. Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation

 “The GST Council’s decision to approve the implementation of next-generation GST reforms is a crucial step towards simplifying India’s tax structure and boosting economic growth. For real estate, these reforms are particularly significant as they will directly benefit from reduced taxes on raw materials like cement and marble blocks, lowering the cost of constructing homes, ensuring easier compliance for developers, and improving overall affordability for homebuyers.”

Mr. Sumit Agarwal, Director, Ashtech Group

 “The government’s move to reduce GST on cement, marble, and other key inputs will significantly reduce construction costs in both real estate and infrastructure. This is a significant step that is expected to not only ease the burden on developers but also stimulate demand and give a strong boost to the industry as a whole.”

Mr. Vikas Bhasin, Managing Director, Saya Group

 “We welcome the government’s decision on broad GST rate rationalization, which will benefit the public at large. The reduction of GST on cement is also a positive step and will help ease construction costs. However, it is important to note that construction materials account for only about 25–30% of the overall cost of real estate projects, and cement is just one of the many inputs. Therefore, the impact of this move on end prices will be limited.”

Mr. Deepak Kumar Jain, Founder and CEO, TaxManager.in

 “Real estate, being one of the most labour-intensive sectors, is expected to gain significantly from the reduction of GST rates—from 28% to 18%—on key construction materials such as cement, tiles, and other inputs. This move will help lower overall construction costs to some extent. It is also expected that developers will pass on these benefits to homebuyers by reducing property prices, which have risen sharply over the past few years.”

Mr. Jetaish Gupta, Founder & Director, Adore Group

 “Today’s announcement to slash GST on cement from 28% to 18% is an enabling gesture for real estate. As one of the largest input costs is reduced, the reform enables builders to deliver affordable homes and expedite project timelines. For homebuyers, the tiered system of GST will ensure price points are more affordable, and India’s housing dream will get a new lease of life.”

Mr. L.C. Mittal, Director, Motia Builders Group

 “With the GST slab being rationalized for construction materials, developers will focus on innovation and value rather than just costs. The primary beneficiaries will be affordable and mid-segment housing categories, ensuring quality housing is accessible to families in urban and semi-urban areas.”

Mr. Annuj Goel, Chairman, Goel Ganga Developments

 “This is a double bonanza for home buyers, with cheaper houses leading to lower GST. For builders and construction companies, this landmark reform enables effective construction and affordable housing. Savings can be directed to unique amenities and eco-friendly designs, making property ownership attractive and accessible.”

Mr. Manoj Goyal, Director, Forteasia Realty Pvt. Ltd.

 “With a simplified GST regime, the sector will enjoy more transparency and renewed trust among stakeholders. The lower tax on cement reduces construction costs, raises supply, and revives demand, offering fresh hope to builders and buyers alike.”

Mr. Ashish Agarwal, Director, AU Real Estate

 “The move to rationalize GST slabs is a crucial development that brings much-needed clarity and simplicity to the real estate taxation system. By easing the overall tax burden on housing, it is likely to boost buyer confidence and encourage quicker, more confident purchasing decisions. For developers, having a more predictable and streamlined tax structure means fewer hurdles and smoother progress on projects. This change is set to inject new energy into the real estate sector, paving the way for steady growth and reinforcing India’s stature as a vibrant housing market.”

Mr. Parvinder Singh, CEO, Trident Realty
 

“The shift to a streamlined GST structure is an impactful reform for India’s real estate sector. With rates on key materials like cement now lower, construction becomes more cost-efficient, giving developers room to build smarter with greater flexibility in pricing. This simplification enhances cost transparency, reduces tax inefficiencies, and offers a more stable environment for long-term planning. For homebuyers, the impact is twofold with greater affordability, and a noticeable uplift in overall value. These savings give us room to do more – invest in smarter layouts, sustainable materials, and the kind of modern conveniences today’s buyers expect. By easing the overall tax load, this reform is expected to make quality housing more accessible while energising demand across key urban markets.”

Mr. Rohit Gera, Managing Director, Gera Developments

 “The government’s decision to lower GST rates and eliminate two slabs is a bold and strong measure — not just tinkering at the margins. This structural simplification underscores a commitment to transparency and ease of doing business. Coming ahead of the festive season, it is a bonanza for businesses and consumers alike, setting the stage for a surge in consumption and a meaningful boost to GDP. For the real estate sector, lower transaction costs and greater clarity will enhance affordability for homebuyers, lift demand across price segments, and add momentum to the broader growth cycle.”

Mr. Deep Vadodaria, Managing Director, Nila Spaces Limited

“The recent GST slab rationalization marks a pivotal shift for the real estate sector. Affordable housing is set to gain significantly, as reduced tax outflows will make home ownership more accessible for first-time buyers and middle-income families. More importantly, these changes will also ease the monthly cash flows of Indian households since essentials are now cheaper, and families will save more on their daily necessities. This additional liquidity enables buyers to take on higher risk for long-term assets like homes, directly improving affordability. In effect, demand will be buoyed by two key factors: lower construction input costs and higher disposable incomes. This aligns well with the government’s push toward Housing for All and will stimulate demand in Tier 2 and Tier 3 cities, where affordability is the key driver.

On the other hand, luxury housing falling under the 40% slab will see muted momentum in the short term, as higher taxation makes buyers more cautious. Developers will need to innovate, focusing on differentiated experiences, green design, and value creation to maintain traction in this segment. Overall, the restructured GST slabs will not only boost affordability but also steer the market toward a more balanced and inclusive growth trajectory.”

Mr. Abhishek Raj, Founder & CEO, Jenika Ventures

“The forthcoming introduction of the Next-Gen GST is a step in the direction of greater transparency and ease of business in real estate taxation. The simplification of tax slabs to 5% and 18% rationalizes a fragmented system and is expected to ease compliance across the board. One of the biggest pluses for the sector is the reduction of tax on primary building materials like cement and steel, earlier taxed at 28% and 18%, respectively. The move will increase the viability of projects and give developers greater choices at prices, particularly for housing projects in urban locations. But the lack of input tax credit (ITC) is still an unbeatable hurdle. For work in progress, where cost minimization is such a critical aspect, disallowance of ITC disqualifies the very intention of reduced input taxes from being realized. A more balanced approach, i.e., the return of partial ITC, would have transformed this reform from a change in compliance to an actually revolutionary policy for the real estate industry.”

Mr. Pawan Sharma, Managing Director, TRG Group

“The GST simplification is definitely a step in the right direction for the real estate sector. Merging the earlier 12% and 28% slabs into a simpler 5% and 18% structure streamlines compliance and brings more transparency to taxation, benefitting developers as well as buyers. But the root cause of high input costs remains, particularly the absence of input tax credit (ITC). Raw materials like cement and steel, which are critical to construction, remain highly taxed without putting pressure on project economics. It disproportionately affects affordable and mid-income housing, where the margins are thin and there is little room for price flexibility. While the reforms will alleviate some pain on compliance and procurement, the long-term financial viability of the segments would be substantially enhanced by an overall integrative approach, with, if feasible, the reversion to partial ITC. This would ensure affordability and the financial viability of developers along urban growth corridors.”

Mr Viren Mehta, Founder & Director, ElitePro Infra

“The new GST reforms are a major step towards a more structured and transparent tax regime. For the luxury residential segment, the introduction of a 40% GST slab for high-end inputs like high-end fittings, imported materials, and specialized services does raise cost considerations, which can potentially add to the cost of construction by 8–12%. Yet this also presents a chance for the industry to transform. The appeal for high-end housing continues to hold strong, particularly in cities, where customers are more looking for well-designed, High-value properties. Builders and advisers will now have to react with more differentiated, cutting-edge offerings that emphasize thoughtful design, quality construction, and effective cost control. Though the upper tax slab is an attempt to distinguish necessity from luxury consumption, it also spurs innovation in luxury development. By means of prudent planning and adaptive approaches, the segment can maintain its growth track without compromising on quality or consumer expectations.”

Mr. Sandeep Aggarwal, Chairperson & Managing Director, AIL Developer

“Recently, the GST council’s decision to streamline all the taxes to 5%-18% is a great move by the government, as it provides relief to the real estate sector. The reduction of GST on key materials like cement to 18% is particularly encouraging, as it will help in lowering construction costs and enhance affordability for mid-income and housing buyers in metros and tier-II cities while stimulating stronger participation in the housing market.

Concurrently, the suggested 40% GST on certain high-end imported fittings and interiors for luxury projects is a cause of concern. Although these products account for a smaller percentage of overall project cost, they form an integral part of luxury housing, where imported finishes and specialized services are a norm. The additional tax charge could constrict margins and, if transferred, affect buyer mood in this space.

Additionally, an easing transition model through phased implementation or conditional reliefs would allow for on-ground accommodations of the policy intent. Overall, the reform is a welcome step in the right direction, and with supportive measures such as simplified approvals and affordable financing, it can be made to mean significant value for developers as well as homebuyers.”

Mr. Rajashekar Reddy, Director of Reddy’s Infra Group

” Reduced GST on construction materials will transform India’s real estate sector. From September 22, 2025 onwards, key inputs such as cement, sand, bricks, ceramics, and toiletware reduce from 28% to 18%, reducing project costs and improving developer cash flows. Reduced rates on construction equipment and services will boost urban infrastructure deployments, adding supply of affordably priced houses._ 

Developers will be able to transfer the benefits to homebuyers, which will make properties more affordable and drive demand. Simplified compliances for the two-slab regime (5% and 18%) decrease administrative hassles for builders, especially smaller contractors, facilitating formalization. With price flexibility for developers and customers benefiting through savings, the housing segment is poised for robust growth, supporting government ambitions on housing for all and strengthening the overall construction ecosystem.”

 Mr, Mukesh Kumar, Founder, M-Sanvi Real Estate Pvt. Ltd.

“The GST cut on cement is truly a welcome move for the real estate sector,” said Mukesh Kumar. “For developers like us, it eases one of the biggest cost pressures in construction, and for homebuyers, it means more affordable homes. This decision will not only speed up ongoing projects but also encourage new investments, giving the entire housing market a positive push.”

Mr. Ankur Bansal, CEO & Founder, GDI Partners

“The GST Council’s recent reforms mark a remarkable step towards strengthening India’s economic landscape. By making essential sectors such as insurance and housing more accessible and affordable, this move will not only boost businesses but also directly benefit citizens across income groups. We appreciate the government’s continued focus on inclusive growth and believe these measures will accelerate financial resilience and long-term development for the country.”

Mr. Suketu Thanawala Partner at StraCon Business Advisory Services

” Reduced GST on construction materials will transform India’s homebuilding sector. From 22 September 2025 onwards, key inputs such as cement, sand, bricks, ceramics, and sanitary ware transition to 18% (from 28%), reducing project costs and strengthening developer cash flows. Down rates on construction equipment and services will accelerate urban infrastructure deployments, ramping up supply of affordably priced homes. Real estate builders will transfer savings to homebuyers, allowing entry-level homes to reach broader customers and draw demand. Simplified compliance with the two-slab regime (5% and 18%) reduces regulatory irritants for builders, particularly small builders, inducing greater formalization. With builders achieving price flexibility and customers receiving lower costs, the homebuilding sector is in for robust expansion, supporting government initiatives on housing for all and strengthening the construction ecosystem on the whole.”

Mr. Ashish Kukreja, CEO and Founder of Homesfy.in and mymagnet.io

“GST 2.0 is not just an incremental reform but a structural reset for Indian real estate. The shift to a broad two-slab structure of 5% and 18%, along with a 40% demerit rate, signals the government’s intent to simplify and strengthen an eight-year-old tax regime. For our sector, the rationalisation of rates on key construction materials like cement and steel from 28% to 18%, and granite blocks and sand-lime bricks from 12% to 5%, directly translates into lower project costs and more affordable homes.

Real estate already employs over 7 crore Indians, making it the country’s second-largest employer. These reforms will encourage developers to launch more projects, creating new jobs and improving buyer sentiment. Importantly, a simpler, more transparent GST framework can help resolve long-standing challenges around input tax credits and compliance, while also attracting institutional capital into emerging segments such as affordable housing, co-living, and rental housing.

There will naturally be transitional issues in adapting to the new framework, but the overall direction is positive. GST 2.0 gives buyers affordability, developers confidence, and the sector a foundation of trust, and that combination is vital for the next phase of growth in Indian housing.”

Mr. Aniruddha Mehta, Chairman & Managing Director, Umiya Buildcon Ltd

“The rationalisation of GST under the proposed reforms marks a landmark moment for the real estate and construction industry. Simplifying tax slabs on key inputs like cement, steel, and paints will reduce pricing inefficiencies, improve procurement processes, and ease cash flow challenges — all of which are crucial for sustainable project execution. Even a modest reduction in input costs can significantly enhance project viability and timelines, particularly in affordable and mid-income housing where pricing sensitivity is high.

Beyond cost savings, GST 2.0 has the potential to catalyse growth and job creation across the broader ecosystem. As one of the country’s largest employment generators, real estate stands to benefit from improved liquidity and reinvestment opportunities, leading to more jobs in construction, allied industries, and services.

Moreover, a simplified and transparent tax regime instills greater confidence among both homebuyers and long-term investors. It can drive capital inflows, support sustainable building practices, and ultimately contribute to India’s housing and infrastructure goals. That said, clarity on transitional provisions and tax credit flow will be essential to ensure a smooth shift and protect near-term working capital cycles.”

Ms. Binitha Dalal, Founder & Managing Partner, Mt. K Kapital

“The rate rationalisation by the government is a welcome move and marks the first step towards a series of bold initiatives to strengthen the Indian economy. For upcoming projects, this reform could lead to cost savings of up to 5%, depending on their stage of execution and material requirements. The impact on ongoing projects, however, is likely to be relatively modest. We also believe the government should take additional steps to give a strong boost to affordable housing and reconsider the double indexation of GST on redevelopment and JDAs. Such measures will make housing more accessible and enhance competitiveness. Overall, this decision reflects a progressive approach, and we look forward to more reforms that support growth.”

Mr. Mohit Goel, Managing Director, Omaxe Ltd.

“The introduction of a two-slab GST structure is a timely reform that we wholeheartedly welcome. By reducing rates on key inputs like cement, granite and marble, the government has eased cost pressures in construction and simplified compliance, improving affordability for homebuyers, especially in the under-construction segment.This reform comes at an important moment with stable interest rates, strong festive sentiment and rising demand for quality housing shaping a positive outlook. At Omaxe, we see it as an opportunity to accelerate our vision of creating sustainable, community-centric developments in metros and high-growth tier-2 markets such as Chandigarh, Lucknow, Indore and Bhopal. This balanced approach to taxation will not only benefit homebuyers but also strengthen the broader housing ecosystem, driving investment, employment, and confidence across Bharat’s growing cities.”

 Ms. Amrita Gupta, Director, Manglam Group 

 “The festive quarter has always been a natural catalyst for homebuying and this year the backdrop is even stronger. The GST Council’s recent cuts, from 12% to 5% on marble and granite blocks and 28% to 18% on key cements, signal softer input costs and help ease pressure on future pricing. For buyers it reinforces confidence that affordability can hold, and for organised players it enables faster procurement and better value creation. In tier-2 markets like Jaipur we have experienced that families demanding lifestyle-focused homes and aligning purchase decisions with auspicious dates. Mid-segment and lifestyle housing remains the clear focus and are drawing the strongest traction. With banks rolling out festive loan schemes, sentiment and structural tailwinds are coming together to keep momentum strong”

Mr. Aditya Kushwaha, CEO and Director Axis Ecorp

“The GST reduction on key construction materials like marble, granite and cement is a timely boost for the sector. Lower input costs will help developers create better-designed, high-quality homes while keeping projects viable. For markets such as Goa, where interest in second homes and holiday villas is accelerating, especially among NRIs, this move supports sustainable growth and makes lifestyle-oriented real estate a more compelling investment story. It also strengthens the long-term case for creating thoughtfully planned holiday homes that balance affordability, premium design and strong rental potential.”

Mr. Cyrus Mody, CEO and Founder of Viceroy Properties

The GST reforms demonstrate a desired shift towards a more transparent and simplified path to taxation. For luxury real estate, the reduction in GST on cement from 28% to 18% and on items like marble and granite from 12% to 5% means that overall construction costs will reduce by nearly 5%, enhancing project efficiencies. At Viceroy Properties, we believe that these reforms serve as an opportunity to elevate the standards of luxury living in India—whether that be using sustainable materials that are locally sourced or delivering high quality residences that meet global standards. Beyond that, the reforms represent long-term value for discerning homebuyers and investors at a time when the luxury housing demand in India has grown over 40% in the last two years. The clarity gained by reducing complexity and developing confidence amongst investors, will have many more people consider Indian luxury real estate for themselves and from an investment perspective as there really has never been a better time to explore luxury real estate for discerning homebuyers and investors.

Mr. Vimal Nadar, Senior Director & Head of Research, Colliers India.

“The newly announced two-slab GST structure of 5% and 18% is a progressive move to rationalize the prevailing inverted duty structure, improvise classification, simplify approvals & processing refunds. These measures will surely cut costs at different tiers while enhancing the ease of doing business and driving consumption.

Within real estate, the slashing of GST on cement will play a critical role in rehauling project cost structures as cement forms a major value component in the overall cost of construction. Residential real estate, particularly new homebuyers, stand to gain as developers are likely to pass on the benefit of lower costs in the form of reduced housing prices. Developers’ profitability margins, too can potentially improve, enhancing the overall financial health of the real estate sector. The timing of this rollout is appropriate, with the festive season in the offing and the real estate sector is already reaping the benefits of favourable interest rates.”

Mr. Piyush Bothra, Co-Founder and CFO, Square Yards

“The latest GST restructuring comes as a major boost for the real estate sector. With the reduction in costs of key construction materials such as cement and steel, input expenses for developers are expected to ease, making projects more viable. The move towards a simplified two-slab structure will also streamline compliance, making processes smoother and faster. For the residential segment, this is likely to translate into tangible benefits for homebuyers as developers pass on the savings over the coming months. While the impact may take some time to reflect, it could provide much-needed relief in the backdrop of rising property prices and add to overall affordability. Coupled with the optimism of the upcoming festive season, these reforms are well placed to drive stronger demand in the property market.”

Mr. Shrinivas Rao, FRICS, CEO, Vestian 

“The recent reduction in GST rates is poised to strengthen the real estate sector by reshaping demand–supply dynamics. Lower GST on construction materials is expected to enhance housing affordability by reducing input costs, while reduced GST on other goods could improve disposable income, thereby stimulating real estate demand. However, the overall impact may remain limited if these savings are not adequately passed on to end-consumers.”

The GST Council’s rationalisation of rates on key construction materials has been widely welcomed by developers and industry experts. While the impact on housing prices may vary depending on other cost factors, the move is expected to ease input costs, boost buyer sentiment, and provide timely momentum to the real estate sector during the festive season.”

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